The Public Option

The Glittering Eye contrasts Krugman and Samuelson as each comments on the current state of health reform.  Let's add WaPo editor Fredd Hiatt to the mix on the public option:

Which brings us back to the idea of a government-run insurance plan. It allows Democrats to make their base happy, to bash the unlovable insurance companies -- and to claim to be taking care of cost control, too, by ensuring competition in the marketplace.

The claim merits skepticism. If, as advocates sometimes argue, a public plan operates without favoritism, it will be simply one more entrant in the marketplace. Like other companies, it will have marketing and administrative costs. In some markets served by few private plans, it could offer a useful alternative. But it won't radically reduce costs.

If, as advocates argue at other times, the point is to insure sick people whom private companies, despite all regulatory efforts, find ways to shun, the public plan could offer a valuable safety net. But that wouldn't save money.

And if, as seems likeliest -- and as House legislation mandates -- the plan uses government power to demand lower prices from hospitals and drug companies, those providers may lower quality or seek to make up the difference from private payers. Private companies would have to raise their rates, so more people would choose the public plan, so private rates would rise further -- and we could end up with only the public option and no competition at all. Single-payer national health insurance may be the best outcome, but we should get there after an honest debate, not through the back door.

So all the attention on whether Obama will get a public plan, as he says he hopes, misses the bigger point. The question is whether he will allow Congress to use the public option as an excuse to dodge the harder reforms, or whether he will insist on true cost control.

Oddly, Mr. Hiatt seems to have forgotten his own point made in the lead:

First, no one knows for sure how to control costs; and, second, the reforms that are likeliest to work are politically unpalatable.

Does he really expect Obama, Splitter-of-Differences in Chief, to insist on something that is both unpopular and unsure of success?  Hmm, I that that was what Afghanistan was for.  Or Iraq.  Or Waxman-Markey.

No, Obama needs to play to his base on this one; logic and consistency are for another day.

LEFT UNMENTIONED:  Not even Samuelson, in his robust trouncing of the public option, notes that a big winner would be the AFSCME wing of the Democratic Party.  I think we can safely assume that all the new clerical jobs associated with the public plan would be unionized.

Comments

[Jack is Back!]

This just in from the AMA:

Warning! Buying and owning health care insurance does not assure a longer life or prevent death.

[jorod]

There is a corollary to the Chicago Way: Tax payers are chumps.

[Pops]

I don't understand the logic here. I am happy with my government run car insurance and my public-option government life insurance.

In fact, I called the White House yesterday about a new government run umbrella policy and an accidental death policy on my spouse, getting ready for our hang-gliding vacation...
Barack said, "I'm feelin' ya man". And offered a very competitive rate...

[Gregory Koster]

No, tax payers are lemons to be heaved into a turbine powered squeezer.

[megapotamus]

This thing will only FIT through the back door, that is what Hiatt does not state but seems to suspect. It is the root of Obamism on healthcare that anyone who insists on honest debate is a cynical wrecker, regardless of his stated ideology, even if Obama Approved. Watch out, Postie!

[Cecil Turner]

First, no one knows for sure how to control costs; and, second, the reforms that are likeliest to work are politically unpalatable.

The funny part is the best thing he can come up with for cost control is a new tax. What's the latest estimate of defensive medicine costs? 9%? Obviously tort reform wouldn't help. Nor more actual competition (across state lines). Nope, nobody can come up with any ideas at all on cost cutting. Except taxes. Sheesh.

But if we just pump a bunch of government money in there (with the usual controls bureaucrats place on money that's not their own . . . except in those situations where they can siphon a little off for the cause . . . usually by hiding it in a bunch of obscure expenditures), well, that'll help. Right?

[maryrose]

Why do they insist on flying in the face of reason and passing a healthcare bill that no one has asked for or really wants? It's like they are purposefully ignoring the voters and what it is they want which is more jobs. Talk about taking your eye off the ball. Then I read that a minority organization that received 3 billion stimulus dollars is being indicted for fraud. That's our hard earned going into someone's pocket fraudulently. i never believed in reparations but I think it is happening on the sly.

[Dave Schuler]

Thanks for the link, Tom.

[Frau Argwohn]

"Everybody gets the same option or nothing doing."
Can this stop the ninnies? I'm not holding my breath.

[Neo]

Nancy Pelosi wants to rename the "public ption" .. I suggest the "Jason Voorhees Option"

[Gabriel Sutherland]

Time's Karen Tumulty sets up the coming media push to pass health care reform.

Recent weeks, however, have also seen some subtle shifts in the politics surrounding the debate over whether the health-care legislation should include a public option. A new round of polls show that it continues to enjoy broad public support, and the industry's efforts to fight the bill may have backfired politically. Additionally, there are new horror stories of people being denied coverage on unfair pretexts, and reports that insurers are jacking up the rates for small business in advance of the legislation. Meanwhile, the Congressional Budget Office recently determined that a public option could save a significant amount of money, particularly if its payments to providers are tied to Medicare's reimbursement rates, as House Speaker Nancy Pelosi would prefer. That, however, would likely bring strong opposition from doctors, hospitals and other health-care providers, who complain that they are underpaid by Medicare, as well as many moderate Democrats.

I'm surprised she could fit all the DNC talking points into a single paragraph. Yes she can.